The pound has posted strong gains on Tuesday, as GBP/USD trades in the mid-1.51 range in the North American session. On the release front, British Construction PMI rose sharply to 59.1 points. Over in the US, Factory Orders posted a sharp decline of 3.4%.
British PMIs continue to point upwards in the January reports. Construction PMI jumped to 59.1 points, up from 57.6 a month earlier. This easily beat the forecast of 56.9 points. On Monday, British Manufacturing PMI rose to 53.0 points in January, very close to the forecast of 52.9 points. Meanwhile, US Factory Orders were weak, posting a sharp decline of 3.4%, a 4-month low. The pound has received a boost on Tuesday from the strong UK and weak US data, gaining over 100 points.
On Friday, US Advance GDP for Q4 disappointed, posting a gain of 2.6%. The markets had anticipated a gain of 3.0%. Still, market sentiment towards the US economy remains positive, underscored by the Federal Reserve statement last week, where the Fed noted solid growth in the economy. The Fed remains on track to raise rates later in 2015, and the dollar will likely benefit as speculation continues over the timing of a rate hike.
GBP/USD for Tuesday, February 3, 2015
GBP/USD February 3 at 16:20 GMT
GBP/USD 1.5147 H: 1.5149 L: 1.4989
- GBP/USD showed little movement in the Asian session. The pair rose in the European session and has posted strong gains in North American trade, putting pressure on resistance at 1.5165.
- 1.5008 is providing strong support.
- 1.5165 has weakened as the pair trades at higher levels. Will the pound break above this line? 1.5282 is stronger.
- Current range: 1.5008 to 1.5165
Further levels in both directions:
- Below: 1.5008, 1.4873, 1.4781 and 1.4670
- Above: 1.5165, 1.5282, 1.5392, 1.5505 and 1.5642
OANDA’s Open Positions Ratio
GBP/USD ratio is unchanged on Tuesday. This is not consistent with the pair’s movement, as GBP/USD has posted strong gains. The ratio is has a majority of long positions, indicative of trader bias towards the pound continuing to move to higher ground.
- 9:30 British Construction PMI. Estimate 56.9 points. Actual 59.1 points.
- 15:00 US Factory Orders. Estimate -1.8%. Actual -3.4%.
- All Day – US Total Vehicle Sales. Estimate 17.0M.
*Key releases are highlighted in bold
*All release times are GMT
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